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The New York City Office of Environmental Remediation (OER) recently adopted revisions to its regulations governing the E-Designation program that will make it easier for property owners to remove the hazardous materials E-Designation (Haz Mat E). We previously discussed the E-designation program in a Post covering the tools available for developing contaminated sites.
Pursuant to Section 11-15 of the New York City Zoning Resolution (“ZR”), E- Designations are assigned to tax lots during proposed zoning actions to satisfy the City Environmental Quality Review (CEQR). A copy of ZR 11-15 is available Here.
E-Designations may be assigned for noise, air quality or hazardous materials. The E-Designation provides notice to developers that certain environmental requirements must be satisfied before the property can be redeveloped. OER has promulgated regulations that establish the procedures for complying with and removing E-Designations. The types of actions triggering E-Designation are discussed in a DOB Memo
The Department of Buildings (DOB) will not approve permit applications or issue a building permit for certain types of work for tax lots subject to an E-Designation until OER issues either a Notice of No Objection or a Notice to Proceed (NTP). OER will issue an NTP after it approves remedial action plan for the tax lot(s) subject to the Haz Mat E. When the cleanup is completed, OER will issue a Notice of Satisfaction (NOS). DOB will not issue a Certificate of Occupancy for sites subject to a Haz Mat E until OER issues the NOS.
ZR 11-15 provides that where the OER NOS indicates that a tax lot that has an (E) designation requires ongoing site management, OER may require that a declaration of covenants and restrictions governing the ongoing site management requirements be recorded against the tax lot(s). The E-Designation will remain on the tax lot so that future work may be subject to the E-Designation
There may be situations where a property owner or developer can permanently remove a Haz Mat E as opposed to simply complying or satisfying the Haz Mat E requirements. A Haz Mat E can be removed from the tax lot(s) by the Department of City Planning when OER has issued what is known a final NOS. In the past, OER would issue a final NOS when the remediation achieved a Track 1 cleanup. The recent amendments to 15 RCNY §24-08 now authorize OER to issue a final NOS when the remediation allows the tax lot to be put to any use allowed on the site that does not require engineering and institutional controls. OER will send the final NOS to DOB and DCP within ten (10) days.
The amendment also applies to noise and air quality “E” designations. The rule clarifies that where a development project with an E-Designation for noise and/or air quality has been built out to its full development potential according to zoning, and installation reports demonstrate that the noise or air quality requirements have been fully completed, the E- Designations for air quality and noise can be removed from a tax lot consistent with Section 11-15 (d)(1) of the Zoning Resolution of the City of New York.
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Earlier this week the Trump Administration unveiled its “Legislative Outline for Rebuilding Infrastructure in America”. Among the proposals were three amendments to the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) that are designed to incentivize redevelopment of contaminated properties. The proposal can be viewed Here. Since this document is an overview, it does not contain statutory language.
The first proposed change involves National Priorities List (NPL) sites. Currently, these sites are not eligible for Brownfield funding under CERCLA § 104(k) since they are excluded from definition of brownfield site of §101(39) (B) and eligible response site of section §101(41) (C). The proposal would allow non-liable parties to be eligible to receive grants and low-interest revolving loans to conduct assessments, complete cleanups, and implement remedy enhancements to accommodate development and perform long-term stewardship at NPL sites or portions of NPL sites. This proposal would include:
- areas of the NPL site that are not related to the response action;
- areas that can be parceled out from the NPL response action;
- areas where the NPL response action is complete but the site has not been delisted yet; or
- areas where the NPL response action is complete but the facility is still subject to orders or consent decrees under CERCLA
Oddly, the Administration proposes to accomplish this goal by amending CERCLA §101(40) which defines a bona fide prospective purchaser instead of the brownfield site definition at § 101(39) where the NPL exclusion is located. This calls into question of other parties that qualify for other landowner liability protections such as the innocent landowner and contiguous property owner as well as the third-party defense would qualify for this financial assistance.
Another important amendment would be to clarify and expand the current liability exemption State and local governments set forth in CERCLA §101(20) (D). This section excludes from the definition of owner or operator units of state government or local governments that involuntarily acquire contaminated property by virtue of their sovereign function. Local governments have been concerned about eminent domain actions where they obtain title through a negotiated purchase in lieu of condemnation (see City of Wichita v. Aero Holdings, Inc, 177 F. Supp. 2d 1153 (D.Kan. 2000)0 or in the absence of a judicial ruling that the local government lawfully exercised its power of eminent domain. The Administration proposal does not explain how it will amend §101(20)(D) to eliminate this concern. However, it does state that such liability protection would be conditioned upon State and local governments not contributing to the contamination and meeting the obligations imposed on Bona Fide Prospective Purchasers (BFPPs), including exercising appropriate care with respect to releases of hazardous substances at the facility
It should be noted that towards the end of 2017, the House of Representatives passed the Brownfields Enhancement, Economic Redevelopment, and Reauthorization Act of 2017 (H.R. 3017) which appears to encompass some of the changes proposed by the Administration. The bill reauthorizes the federal brownfield program and amends the definition of brownfield site to include sites where there is no viable party and EPA determines it is appropriate that the site be assessed, investigated, or cleaned up by a non-liable party. It also amends §101(20)(D) by deleting reference to “involuntarily” acquiring title. The legislature would allow local governments to be eligible for brownfield funding where if they do not qualify as a the BFPP because they acquired the site prior to January 11, 2002 and did not otherwise contribute or cause the contamination. A Senate bill has similar language regarding the local government exemption
Finally, the Administration proposes to amend CERCLA Section §122(a) to provide EPA with express settlement authority to enter into administrative agreements with BFPPs and other statutorily protected parties to perform remedial action in appropriate circumstances (e.g., partial, early remedial action) would promote and expedite the cleanup and reuse of Superfund sites. Currently, this section provides the President with authority to enter into an agreement with any person to perform a response action when the President determines the action will be done properly. However, when EPA enters into a settlement for a remedial action with a potentially responsible party, the settlement must be approved by the Attorney General and entered the United States District Court as a consent decree. The need to obtain DOJ approval can be time-consuming and often discourages EPA regional offices from considering Prospective Purchaser Agreements or other administrative settlements with BFPPs.
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Sweener v. St.-Gobain Performance Plastics Corp. 2018 U.S. Dist. LEXIS 19893 (N.D.N.Y. Feb. 7, 2018), is the first reported decision interpreting CPLR § 214-f-the 2016 amendment to the New York statute of limitations applicable to personal injuries or property damage resulting from latent effects of exposure to toxic substances.
This lawsuit is one of several lawsuits before the court arising from the contamination of groundwater with perfluorooctanoic acid (“PFOA”) in the Village of Hoosick Falls, New York.. The plaintiff alleged that contamination of the municipal water supply caused her to suffer personal injuries, including uterine cancer. The defendant moved to dismiss the Amended Complaint as time-barred under the state statute of limitations of § 214-c and the recently enacted § 214-f.
CPLR § 214-c provides a three-year period in which to commence actions seeking damages for “personal injury or injury to property caused by the latent effects of exposure to any substance or combination of substances,”. The “clock” for initiating a cause of action for such damages begins to run from the date that the ‘injury’ was discovered or could have been discovered with reasonable diligence.
The statute also provides a limited exception where the cause of injury is not immediately known. CPLR § 214-c(4) provides that if a plaintiff discovers the cause of injury within five years of discovering its injury, The plaintiff may commence an action within one year of discovering the previously unknown cause, assuming the additional conditions are satisfied.
In her amended complaint, Plaintiff alleged her injury occurred in May 2016 when she learned that she had high levels of PFOA in her blood. However, the court ruled that under New York law, the “discovery of injury” occurs “when the injured party discovers the primary condition on which the claim is based. The court went on to say that the fact that there may be a delay before the connection between the symptoms and the time the plaintiff learned she was exposed to PFOA did not delay the start of the limitations period.
Because plaintiff’s cancer was the “primary condition” for which plaintiff sought damages and she was diagnosed in August 2010, the court held her claims expired in August 2016 at the latest even- nine months before she commenced her action. Thus, the court explained, her claims were untimely even under the unknown cause exception of CPLR § 214-c.
The court then turned to the applicability of § 214-f. Because this provision was added to CPLR § 214 in 2016 specifically in response to the PFOA contamination Hoosick Falls, it is commonly called the “Hoosick Falls” exception. This amendment provides that “an action to recover personal damages for injury caused by contact with or exposure to any substance or combination of substances contained within an area designated as a superfund site” under New York or federal law “may be commenced by the plaintiff within the period allowed pursuant to [§ 214-c] or within three years of such designation of such an area as a superfund site, whichever is latest.”
The court ruled that the Hoosick Falls exception applies to this lawsuit involving the PFOA contamination at Hoosick Falls. I guess one cannot blame defense counsel for trying…………
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In his recent budget proposal, Governor Cuomo proposed a three-year BCP tax credit deferral. The proposed deferral which is located in Part S of Revenue Article VIII is similar to that enacted in 2010 during the depth of the Great Recession. Taxpayers claiming BCP tax credits in 2018-2020 would be limited to $2MM each year. Taxpayers will be able to begin claiming the deferred nonrefundable credits in full starting in 2021. 50 percent of the refundable credits would be able to be claimed in 2021, 75 percent of the remainder in 2022, and the remainder in 2023.
The 2010 deferral had been the subject of a takings claim in Empire Gen Holdings, Inc. v. Governor of New York, 967 N.Y.S.2d 919 (Sup. Ct-Albany Cty. June 25, 2013). Plaintiff had constructed a 65 megawatt natural gas fired electric generating plant that received a Certificate of Completion (COC) in 2008. The plaintiff claimed and received the site prep tax credit. After the property was placed into service in September 2010, plaintiff claimed tangible property tax credit of $86,951,916 for 2010. However, because the Tax Credit Deferral Provisions became effective on August 11, 2010 and plaintiff did not place its property into service until September 2010, plaintiffs’ 2010 BCP tax credit was reduced to $1,663,633 with the balance of the full redevelopment tax credit deferred until 2013 and thereafter.
Plaintiff alleged the Tax Credit Deferral Provisions amount to an unconstitutional taking and was a violation of the Due Process, Equal Protection and Contract Clauses of the State Constitution. The Supreme Court of Albany County granted the State’s motion to dismiss on grounds that the plaintiff had no cognizable injury. The court ruled the plainiff”s rights to claim the BRTC did not vest until the property was put into service. On the Contracts Clause cause of action, the court said that the New York Constitution provides that tax exemptions are freely repealable and found no legislative intent in the brownfield statute (ECL, art 27, tit 14) and the related Tax Law sections that the State was bound to paying the full BRTC without deferral.
Earlier, the plaintiff sought a permanent injunction in federal court seeking to bar New York from enforcing the deferral provision and a ruling that they were unconstitutional. However, the United States District Court for the Northern District of New York ruled the challenge was was barred by the Tax Injunction Act and the principle of comity because the plaintiff sought a federal-court ruling on a local tax matter because the relief plaintiffs sought (i.i.e., money damages and a judgment declaring the statutes unconstitutional and enjoining their enforcement) would have interfered with New York’s assessment and collection of tax revenue, and thus with New York State’s administration of its fiscal operations. Empire Gen Holdings, Inc. v. Governor of New York, 2012 U.S. Dist. LEXIS 96023 (N.D.N.Y. July 11, 2012)
If the Governor’s proposal is enacted into law as currently drafted, BCP projects that received Certificates of Completion but have not placed the property into service (e.g., received a certificate of occupancy)will be subject to the deferral. Sites that are under a deadline to obtain a COC by December 31, 2019 would probably want to delay putting their project into service until after the deferral period expires.
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